Wall Street Journal (Delinquency Rate)

The number of mortgage delinquencies has soared in the last three
months, and 2006 is on track to be one of the worst ever for sub-prime
loans, according to a survey by UBS AG.

In October, roughly 80,000 borrowers were 60 days or more behind in
payments on 3.9 percent of the sub-prime home loans packaged into mortgage
securities this year, UBS found. That’s nearly twice the delinquency
rate on new sub-prime loans recorded a year earlier, making this one of
the worst years ever for sub-prime lending.

Soaring delinquencies are making some lenders more cautious, which is
likely to put further pressure on the weak housing market.

How much higher delinquencies climb will depend in part on the depth of
the current housing slump, according to UBS.

Mortgage delinquencies generally rise when the housing market cools
because borrowers who are in financial trouble find it more difficult to
sell their homes. In addition, if prices fall, they may not have enough
equity in their homes to refinance their mortgage. Among those feeling
the pain are investors in the sub-prime loan market.

Source: The Wall Street Journal, Ruth Simon and James R. Hagerty
(12/05/2006)

I’m working with one right now. Her sub-prime mortgage adjusted from 6.99 to 9.99 then 10.99 and she just can’t afford the property any more. She can’t refinance either due to some credit issues and property values. She is forced to sell but she doen’t have much time before the Notice of default is filed. I’m really trying to help her avoid that.

If you were ever thinking about investing in pre-foreclosures or doing foreclosure prevention and loss mitigation as a sideline, now is the time. It’s only going to get worse.

“If you were ever thinking about investing in pre-foreclosures or doing foreclosure prevention and loss mitigation as a sideline, now is the time. It’s only going to get worse.”

Correctamundo! Now is definitely the right time to sweep up all of the defaults
that are coming into play. Too many high risk loan products for consumers to
maintain current.

We just purchased our foreclosure house we live in this August. The bank wanted $269,900 so we offered $232,000 and ended on paying $235,000. When our appraiser went through the place it was appraised at $285,000 which is pretty accurate.

There were only two other bids by real estate investors in my neighborhood, they both bid under $200,000. So my bid must have looked pretty good, even though I also low balled them.

Hopefully this motivates people to look at foreclosures and to not ever be affraid to low ball.

Getting a place you like that you’re going to live in for 80% of its value is a home run in my book. Nice job! Always make the offer, even if you think they will not accept it. You never know. To quote the Great One, “You miss 100% of the shots you don’t take.”